Media releases

DRD accelerates hedge close out

Durban Roodepoort Deep, Limited (DRD) has announced the placement of 10.0 million new shares to raise approximately $40 million, $35 million of which will be used to accelerate the close out of the company’s hedge book positions. 107/02-jmd

For immediate release

Durban Roodepoort Deep, Limited (DRD) has announced the placement of 10.0 million new shares to raise approximately $40 million, $35 million of which will be used to accelerate the close out of the company’s hedge book positions.

The balance of the proceeds, net of costs, will fund DRD’s exploration programmes in Papua New Guinea and Australia, including the new Saki project.

This buyback will result in the close out of 50% of the remaining revenue hedge book.

Commenting on the placing by CIBC World Markets to primarily North American investors, DRD’s Chief Financial Officer, Ian Murray, said: "The recent strength in the Rand has provided us with the opportunity to close out positions early.

"The gold price in Rand terms is now the lowest it has been since early December 2001 and, given our intention to eliminate our hedge book, the timing seems favourable. There was strong demand for the shares and the size of the placement had to be increased from 7.0 to 10.0 million shares as a result. The shares were placed with approximately 20 institutions, most of which are new holders of DRD shares. The geographic spread of this placement was 50% in Canada, 43% in the United States and 7% in Europe and the United Kingdom.

"Today’s placement, together with other funding mechanisms we have in place – such as the structured finance facility we have mandated Standard Bank to arrange – will ensure that we can meet our commitments to fully participate in the spot gold price from 30 June this year and to significantly uplift our earnings."

Queries: James Duncan

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